Court deals U.S. defeat in Islamic fund case

Ruling may stymie trial of Arnaout

In a blow to prosecutors, a federal judge has tossed out a 101-page document intended to prove that the head of a Palos Hills-based Islamic charity helped orchestrate a conspiracy to funnel money to violent groups such as Al Qaeda.

The unusual decision by U.S. District Judge Suzanne Conlon means that the government is likely to have a hard time introducing certain key evidence at the trial of Enaam Arnaout, scheduled to start next week, legal experts said.

Prosecutors allege in the document that Arnaout is connected to members of Al Qaeda and that his charity provided support to Osama bin Laden. The document also cites memos and correspondence that allegedly show that the charity, Benevolence International Foundation, aimed to assist Muslim fighters from Afghanistan to Sudan and "make Islam supreme on this Earth."

Conlon's ruling, filed Monday and made public Wednesday, does not mean that the government cannot try to introduce this evidence. But it does make it much more difficult.

Joseph Duffy, an attorney for Arnaout, declined to comment on the judge's ruling.

A spokesman for U.S. Atty. Patrick Fitzgerald also declined to comment, but the decision represents a new hurdle for prosecutors. The Arnaout case is the first that Fitzgerald has personally prosecuted since arriving in Chicago in September 2001. Fitzgerald is considered a leading expert on bin Laden and terrorism, having prosecuted cases in New York involving the 1993 World Trade Center bombing and the 1998 U.S. Embassy bombings in East Africa.

On Wednesday, another government document identified the prosecutors' star witness for the first time: Jamal Ahmed Al-Fadl, a member of Al Qaeda whose testimony was also the linchpin in the embassy bombing case.

Prosecutors have charged that Arnaout, 40, a naturalized U.S. citizen born in Syria, engaged in a racketeering conspiracy to defraud donors to Benevolence by using some of their money to support groups such as Al Qaeda instead of humanitarian causes.

Prosecutors filed the 101-page document, called a Santiago proffer, last month in order to convince the judge that statements by Arnaout's alleged co-conspirators should be allowed at his trial. Conlon sealed the filing at the request of defense attorneys and made it public last week at the urging of the Chicago Tribune.

Statements made out of court are usually considered to be "hearsay" and are not admitted into evidence, but they would be allowed if the government could prove that the defendant took part in a conspiracy. A judge's approval of a Santiago proffer gives blanket admission to such statements.

The government filing in the Arnaout case alleges that he was part of a "15-year, international conspiracy to use ostensibly charitable organizations to support violence overseas on behalf of ostensibly Islamic causes."

The filing quotes from documents, including e-mails, memos and photographs, found in government raids on Benevolence's offices that allegedly show the charity's support for violent groups in Sudan, Bosnia, Chechnya and elsewhere. It also cites an Al Qaeda member who allegedly was told by bin Laden in 1993 that the charity was one of several used to fund Al Qaeda's operations.

Conlon wrote that the government filing relies heavily on documents with dates and authors that can't always be identified. The proffer "is devoid of analysis linking proffered hearsay to a specific conspiracy," the judge wrote.

Citing the "insufficiency" of the government filing, she ruled that the government hadn't shown "by a preponderance of the evidence" that certain statements could be linked to a specific conspiracy.

Legal experts said the ruling is a setback for the government because it makes it difficult to get co-conspirator statements admitted at trial.

"It's a very serious problem for the government's case," said Mark Flessner, a former assistant U.S. attorney in Chicago. He said judges rarely reject prosecutors' Santiago proffers.

The government can still attempt to have each co-conspirator's statement admitted at Arnaout's trial, based on evidence presented in the case, said Ronald Allen, a law professor at Northwestern University. But Allen said Conlon's ruling indicates the judge probably won't be inclined to admit the statements.

"It doesn't necessarily strike a death blow, but it's not a good sign for the government," Allen said. "It probably makes the government's case considerably more difficult."

Conlon also ruled that prosecutors won't be allowed to link Arnaout in their opening statement to Mohamed Loay Bayazid, an alleged Al Qaeda operative described as a onetime leader of Benevolence. Experts said the ruling suggests that she might not allow evidence about him to be introduced at the trial.

The government's document said Bayazid was an Al Qaeda operative who tried to obtain uranium to develop a nuclear weapon for bin Laden. Bayazid, 42, a native of Syria who once lived in Kansas City, Mo., also served as president of Benevolence in 1994, the government said.